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Tuesday, October 23, 2012

Netflix, Inc. (NASDAQ:NFLX) Q3 Report To Determine Subscriber Growth

The third quarter
results are going to shed some light on subscriber profits and costs of
international expansion.

The Q3 results of Netflix,
Inc.(NASDAQ:NFLX) will help investors in understanding the position of the
video subscription service against the tougher competitors in the market.

Subscriber growth is
almost always crucial for assessing quarterly updates of Netflix. It may not be
that different when the figures for July-through-September period come out
after the stock market closes on Tuesday.

The quarter accounts
for a traditionally slow period for Netflix since summer’s linger daytime hours
and holidays make it difficult to get people to pay extra to watch movie old TV
series. Netflix executives also predicted that the broadcast of the Summer
Olympics in late July and early August to dampen households from purchasing
another entertainment package during the two-week period.

In spite of such
challenges, Netflix had predicted that it would gain 1 million to 1.8 million
more users to its main line of business, which is streaming television shows
and streaming videos with high-speed internet connection. Based on such estimates,
Netflix must have ended September with 24.9 million-25.7 million US subscribers
to its $8 each month streaming service.

The company had
expected to lose 6,00,000 to 900,000 subscribers to its DVD-by-mail rental
service. The service has been steadily declining ever since Netflix had started
to charge a separate fee for the option the previous year.

The third quarter
growth may determine if Netflix requires revising its goals of adding 7 million
streaming subscribers in the US this year. A number of analysts believe that
Netflix will have to lower its target. Arvind Bhatia, an analyst at Sterne Agee,
is of the opinion that Netflix’s stock will drop if the full-year aim for
subscriber growth is modified below 6 million.